The Finance Professionals' Post educates readers in the finance and banking sectors on the forces that shape their business. The FPP is a publication of the New York Society of Security Analysts (NYSSA).

9 posts from July 2013

07/31/2013

If you don't think of job search as "marketing," you're wrong. When it comes to searching for your next career, you must think of yourself as a brand. Why would anyone purchase? What sets you apart from the next similar product? In this NYSSA Career Chat™, Five O'Clock Club Career Coach Nancy Deering discusses the importance of personal branding. Here, you'll learn that "selling yourself" effectively can set you apart from a sea of other candidates.

07/29/2013

Data is not sexy. Data scientists, despite largely being associated with statistics and technology, are, however. The ‘sexiest job of the 21st century’ is finally coming to banking. The problem is, though, every industry wants to recruit them.

HSBC has stuck its neck out and started the hunt for a ‘data scientist’: “Early arrivals have a great opportunity to shape the development of this core capability,” it says. Other banks, via recruitment agencies, seem to be following suit. Despite all the furore around big data, and its revenue generating possibilities, banks have so far resisted the urge to build big teams around it.

07/24/2013

We provide evidence that individuals optimize imperfectly when making annuity decisions, and that this result is not driven by loss aversion. Annuities are more attractive when presented in a consumption frame rather than in an investment frame. Highlighting the purchase price in the consumption frame does not alter this result. The level of habitual spending has little interaction with preferences for annuities in the consumption frame. In an investment frame, consumers prefer annuities with principal guarantees; this result is similar for guarantee amounts below, at, and above the purchase price. We discuss implications for the retirement services industry and its regulators.

07/22/2013

The term "angel investors" originally was used for wealthy individuals who financed Broadway plays. Today it
describes those who finance business startups. With the growth of entrepreneur activity in New York,
it has gained new prominence for both those involved and startups, and for those who may help
finance them. Most angel investors don't make any money. Most
business startups fail. Many business startups have no informed idea on how to get funding. Angel
investors can provide the initial capital before the business is ready to seek venture capital funding, making What Every Angel Investor Wants You to Know: An Insider Reveals How to Get Smart Funding for Your Billion Dollar Idea a significant asset.
The book, by New York Angels Chairman Brian Cohen, is a systematic step-by-step guide with "Takeaways " at the end of each chapter and real-life examples—which are essential.

07/21/2013

Seven years before the assassination of Julius Caesar, an acrimonious dispute broke out between Marcus Tullius Cicero, at the time the provincial governor of Cilicia, and Marcus Junius Brutus, a young provincial Roman administrator. The elder statesman chided the younger man for using his administrative post in Cyprus to earn ill-gotten gains at the expense of the local people. Cicero received reports that Brutus had been lending money in Cyprus at four times the maximum rate stipulated by Roman law. To make matters even worse, he did it anonymously through an agent who did not mind using strong-arm tactics to collect the debts. When Cicero brought the matter to his attention, Brutus ignored him and continued to lend money. When he finally returned to Rome, he did so a wealthy man.

The problem caused Cicero to coin a name for the practice which became a cornerstone of Roman law. The story was told innumerable times over the next 1,800 years. The Roman historians dutifully recorded it, and Adam Smith alluded to it in the Wealth of Nations. According to Roman law, simple interest was permitted, but compound interest was anathema. Compounding had been used in many ancient civilizations, but the Romans eventually made it illegal. By doing so, they also established a tradition that would create much confusion in the centuries to follow. They did not make all interest illegal, only compound or “accumulating interest.”

Prohibitions against excessive interest, or more properly usury, have been found in almost all societies since antiquity. Charging interest on loans is the oldest financial practice. It has also been decried almost from the beginning as predatory, with the lender seeking to take advantage of the borrower. Whether loans were made in cash or in kind, unscrupulous lenders were said to be practicing a beggar-thy-neighbor policy by ensuring that the borrowers were disadvantaged to the point of losing their collateral, or in extreme cases even losing their freedom or families. Charging simple interest was barely condoned, but charging compound interest was unscrupulous, immoral and rapacious. It was also practiced with near impunity.

07/17/2013

Pay is, of course, becoming a lot more complex in the financial sector and investment banks are keen to build their internal compensation teams in order to meet the demands of both employees and regulators. There’s just one problem – there are not enough people available.

Investment banks are slowly building their compensation teams in order to both navigate the tricky new regulatory environment and ensure that pay remains competitive relative to their peers. Banks employ specialists in deferred compensation, equity payments, international tax, and regulatory remuneration issues as well as those tasked with working out cash payments.

07/11/2013

Looking at the big picture is
imperative these days, both in our personal lives and in our careers. But, too often, juggling the myriad of responsibilities
of our daily lives—including racing to meet work deadlines—obstructs our view.

A focus that's too narrow is
dangerous to our personal happiness, in terms of missed opportunities or wrong
turns. And it’s a career killer. Not
seeing the big picture can lull us into staying in a dead-end job, getting
hired by a company that's unethical, or land us in a dying industry.